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OECD Education Working Papers

This series is designed to make available to a wider readership selected studies drawing on the work of the OECD Directorate for Education. Authorship is usually collective, but principal writers are named. The papers are generally available only in their original language (English or French) with a short summary available in the other.

Markets in Education

An Analytical Review of Empirical Research on Market Mechanisms in Education

In the last three decennia, many governments have introduced market mechanisms in education. They
have done so by enhancing parental choice and encouraging school competition, through policies like
abolishing catchment areas, creating voucher programmes and setting up charter schools. These market
mechanisms have given rise to fierce debates in both political and scientific circles. However, most prior
reviews of research literature in this area have concluded that the effects of market mechanisms in
education are small, if they are found at all. This review tries to answer the question why that is the case,
by analysing the causal pathways that link market mechanisms to educational outcomes and by reviewing
the empirical evidence for each step along those causal pathways. The findings of this review point to the
need for a nuanced and qualified discussion about market mechanisms in education. What market
mechanisms mean in actual practice strongly depends on (local) contexts, while the impact of market
mechanisms is related to other policies impacting on parental choice behaviour as well as actions taken by
schools.